If you are just starting out and your new e-commerce business sells physical goods, you may be unsure how to handle your inventory. Keeping an organized, scalable inventory system will ensure that you, your customers, and your employees all remain happy.
Where Should I Start?
As with many aspects of an e-commerce business, the complexity of managing your inventory depends on the type of business you are operating and the product or products you are selling. Managing your inventory can be vastly different if, for instance, you sell antiques as opposed to selling YoYos. The antique dealer must track and store each individual item, while the YoYo seller may have one thousand identical YoYos in stock. However, there is one constant for all e-commerce retailers – you must avoid running out of inventory. The Internet and World Wide Web (WWW) are great business equalizers – it is very easy for your online customers to abandon your business and begin doing business with one of your competitors, a process that can be completed in just matter of seconds through the use of a search engine.
The Golden Rule Is Organization
The “golden rule” of managing your inventory and avoiding product outages is simple, but absolute: your inventory must be organized at all times. If your inventory is organized through the use of a system that is both relatively simple and sustainable, this goal is easily achievable. If you decide to implement an unnecessarily complicated system, or one that is impractical for the varieties and quantities of your product, you will quickly find yourself dealing with the negative consequences of disorganization, including understocked and overstocked merchandise, shipping errors and customer complaints.
How Big Should My Inventory Be?
First, it is important to designate the proper amount of space for storing your inventory. This is especially important for e-commerce businesses that are operated out of the owner’s residence. You must ensure that the space you set aside for your inventory is clean, climate-controlled and spacious enough to accommodate industrial shelving, garment racks or bins. To reduce fulfillment errors, make sure this area is well-lit. To avoid accidents and injuries, ensure that there is enough open space for employees to maneuver while working. Finally, it is vital that the product is stored in an organized, logical fashion – not only will this also reduce fulfillment errors, but you can more easily track item quantities as well.
Next, it is important to determine if your business requires advanced, technological solutions for managing inventory. If your business sells a small number of products, it may be expensive and unnecessary to implement an advanced inventory system. However, if your business sells a large number of unique items and you are unable to effectively track your inventory by sight, it may become necessary to implement an advanced solution. These systems can be as simple as implementing simple barcodes, to using more complex Quick Response (QR) codes that can track more information within the code itself, to advanced Radio-Frequency Identification (RFID) tag systems.